Bosses sell Xayce for £6.1m

BOSSES who set up a Manchester business with £50,000 nine years ago have sold the company for up to £6.1m. Morse, a London-based business and IT professional services firm, has acquired Xayce in a cash and shares deal.

BOSSES who set up a Manchester business with £50,000 nine years ago have sold the company for up to £6.1m.

Morse, a London-based business and IT professional services firm, has acquired Xayce in a cash and shares deal.

It has agreed to pay £2.35m in cash and £1.25m in shares initially, with a further sum of up to £2.5m payable in shares if Xayce achieves profit targets over the next three years.

Xayce was established in 1998 by five former employees of Accenture consultants in Manchester. Three of them - Peter Busby, Alistair Ardern and Steve Wright - remain directors.

The other founders left the company. There are two other shareholders, one of whom is co-director Peter Geiger.

The business helps more than 70 clients in the insurance, retail banking and local government sectors across Britain and Ireland to identify areas where it can improve efficiency and cut costs, such as back office functions, including finance, human resources and procurement.

Among its blue-chip customers are Royal & SunAlliance, Barclays and Lloyds TSB.

Based in Marble Street, Spring Gardens, Xayce employs 25 permanent staff and reported revenues of £4m in the year to March 31, £3m of which came from the financial services sector.

Mr Busby, 40, said: "Morse will give us access to significant additional capabilities and skills, which we believe will be of great benefit to our clients.

"Morse already has a significant client base in the north west, and we look forward to using our skills to help those clients in the future." Mr Ardern, 38, said: "There is clearly an opportunity to grow.

"We see this as a good fit and really positive for Xayce."

Morse, an acquisitive professional services business with a market value of around £150m, said its swoop for Xayce would accelerate the development of its management consultancy division.

Chief executive Kevin Alcock said: "We already have a strong market position in financial services, and the acquisition of Xayce will further enhance our management consultancy capabilities in insurance and retail banking.

"Furthermore, it will give us additional consultancy capability and relationships to more effectively position ourselves for the back office transformation work coming on stream in local government."